COURT ACTS

On the restoration of the ownership rights of citizens to land and residential houses

Case No. 15/97

THE CONSTITUTIONAL COURT OF

THE REPUBLIC OF LITHUANIA

R U L I N G

On the compliance of Paragraphs 1, 4, 9 and 11 of Article 4, Paragraph 1 of Article 8, Item 2 of Article 15 and Paragraphs 1, 2, 3 and 4 of Article 20 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property with the Constitution of the Republic of Lithuania

Roma Dovydėnienė, and Vytenis Andriukaitis, both are Seimas members, acting as the representatives of a group of members of the Seimas of the Republic of Lithuania, the petitioner

Andrius Kubilius, First Deputy Speaker of the Seimas, and Albinas Raudonius, Director of the Department for the Organisation of Land Exploitation and Law under the Ministry of Agriculture of the Republic of Lithuania, acting as the representatives of the Seimas of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1 of Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 12 October 1998, in its public hearing, considered case No. 15/97 subsequent to the petition submitted to the Constitutional Court by a group of Seimas members, the petitioner, requesting an investigation into whether Paragraph 4 of Article 4 the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property was in compliance with Article 29 of the Constitution, Paragraphs 9 and 11 of Article 4 of the said law—with Paragraphs 2 and 3 of Article 46 of the Constitution, Paragraph 1 of Article 8 and Paragraphs 1, 2, 3 and 4 of Article 20 of the said law—with Article 29, Paragraph 1 of Article 24, Article 23, Paragraphs 2 and 5 of Article 46 of the Constitution, and whether Paragraph 1 of Article 4 and Item 2 of Article 15 of the said law were in compliance with Paragraphs 2 and 3 of Article 46 and Paragraph 4 of Article 59 of the Constitution.

The Constitutional Court

has established:

I

On 1 July 1997 the Seimas passed the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (Official Gazette Valstybės žinios, 1997, No. 65-1558; hereinafter referred to as the Law).

A group of Seimas members, the petitioner, requests an investigation into whether Paragraph 4 of Article 4 the Law is in compliance with Article 29 of the Constitution, Paragraphs 9 and 11 of Article 4 of the said law with Paragraphs 2 and 3 of Article 46 of the Constitution, Paragraph 1 of Article 8 and Paragraphs 1, 2, 3 and 4 of Article 20 of the said law with Article 29, Paragraph 1 of Article 24, Article 23, Paragraphs 2 and 5 of Article 46 of the Constitution, and whether Paragraph 1 of Article 4 and Item 2 of Article 15 of the said law are in compliance with Paragraphs 2 and 3 of Article 46 and Paragraph 4 of Article 59 of the Constitution.

II

The petitioner grounds its request on the following arguments.

By the Law of 1 July 1997, the Seimas changed the procedure and conditions of the restoration of the rights of ownership which had been in force until then: the size of land plot to which the rights of ownership are restored was increased to 150 ha, the opportunity to recover land in those territories where industrial gardens, berry plantations and arboreta had been laid out was legalised, certain priorities concerning certain groups of persons were established, as well as the opportunity to recover dwelling-houses which are occupied by the tenants was legalised. By means of this law, the legislature rectified some deficiencies that had been in the former law on restitution, however, reasonable doubts arise regarding the compliance of certain articles of the Law with the Constitution.

The petitioner notes that, analysing the Law and the compliance of its articles with the Constitution, it takes into consideration the arguments of the Constitutional Court’s ruling of 22 December 1995: “It was impossible to impartially reconstruct the complete former system of property relations, as it was necessary to take into consideration socio-economic and other social relations, which had changed. <...> One of the main objectives of law as a means of the regulation of social life is justice. Justice is one of basic moral values, as well as one of the basic foundations of a state under the rule of law. The aspiration for justice and a state under the rule of law is established in the preamble of the Constitution. Justice may be implemented by ensuring a certain equilibrium of interests, by escaping fortuity and arbitrariness, the instability of social life and conflict of interests.”

The petitioner calls in question the compliance of Paragraph 4 of Article 4 of the Law with Article 29 of the Constitution wherein the equality of persons before the law is entrenched. In the opinion of the petitioner, the wording of the Law “the land shall be returned in kind without delay” may be treated in its absolute meaning, which means that land plots will instantly be measured in the locality, according to the old boundaries, without necessary planning nor boundary co-ordination, without the requirement that a land reform project of the organisation of land exploitation be prepared before that. By the impugned norm evident advantages have been granted to the person who is subject to the restoration of the rights of ownership. Due to such legal regulation there might appear negative effects to the work of the organisation of land exploitation. Society is not indifferent as regards the use of land, for preservation of the fertility of land is common need. Therefore, the right of the State to regulate the conditions of restoration of the rights of ownership to land is an inevitable necessity in an attempt to harmonise the interests of former owners and those of society, thus, in restoring the right of ownership, one has to follow strict requirements.

It is stipulated in the norms of Paragraphs 4 and 11 of Article 4 of the Law that the land which is necessary for the maintenance of economic-commercial buildings and facilities that belong to natural and legal persons by right of ownership, as well as the land on which there are specialised gardens, berry plantations and arboreta belonging to agricultural enterprises, shall be returned in kind to former owners unconditionally. In the opinion of the petitioner, the legislature, establishing the conditions for returning agricultural land, may not violate the rights of former owners, however, neither may he ignore the need of society to utilise land as to its purpose. Land is a universal value and it has a social function, which should serve the welfare of the nation.

Paragraphs 2 and 3 of Article 46 of the Constitution provide that the State shall support economic efforts and initiative which are useful to the community and that it shall regulate economic activity so that it serves the general welfare of the nation. In the Republic of Lithuania’s Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991, it was provided that agricultural enterprises’ specialised gardens, berry plantations, arboreta, as well as vegetable patches which have installed irrigation systems, were subject to purchase. The farming lands of such enterprises have been formed when one was orienting himself to prospective economic activities, by making use of long-term investments. Along with the irrigation and draining systems, many other specialised commercial objects have been installed in such enterprises: storehouses, refrigerators, product processing utilities, etc. Such gardens, berry plantations, arboreta, vegetable patches together with all utilities constitute a common production-technological complex. In case land is unconditionally returned, the production-technological integrity of the created complexes will be violated and even the industrial activities of these complexes will be brought to ruin, not to mention that their useful technological opportunities would remain unused. Furthermore, it is possible that the developed infrastructure and improved land may be ravaged. The impugned legal regulation changes in essence the economic conditions of the subjects who are indulged in farming activities, which may incur losses to them and change their legal situation. Therefore, the petitioner is of the opinion that Paragraphs 9 and 11 of Article 4 of the Law contradict Paragraphs 2 and 3 of Article 46 of the Constitution.

The petitioner also doubts as for the compliance of Paragraph 1 of Article 8, Paragraphs 1, 2, 3 and 4 of Article 20 of the Law with Article 29, Paragraph 1 of Article 24, Article 23, Paragraphs 2 and 5 of Article 46 of the Constitution.

The petitioner draws one’s attention to the fact that, according to the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” in its first wording, i.e. that of 18 June 1991, dwelling-houses might be returned in the following cases: (1) they were reconstructed into premises unfit for human occupancy or if they were vacant; (2) tenants, occupying houses subject to being returned, and which were occupied by more than one family, were familiarised with the free option to move into equivalent premises under the conditions proposed by the municipality.

The petitioner notes that, in its ruling of 15 June 1994, assessing the 12 January 1993 amendments of the said norm of the Law, the Constitutional Court held that persons to whom ownership rights to dwelling-houses were being restored, had the possibility of restoring the actual houses under different conditions (after the amendment of the Law they had to face harder requirements than in the first period of its validity). However, new requirements may not be applied to the existing legal relations with the same content, as it would mean violation of persons’ equality before the law. The petitioner also draws one’s attention to the arguments set forth in the aforesaid ruling of the Constitutional Court which state that natural persons, while acquiring dwelling-houses (or portions thereof) by contract, conformed to the rules of conclusion of contracts established by normative acts that were in force at that time, performed obligations of the party ensuing from such contracts, therefore, while restoring the ownership rights to dwelling-houses transferred to natural persons, the rights of natural persons, who have acquired such property, should be protected along with the rights of former owners. Taking account of these arguments, as well as the inviolability of property as guaranteed by the Constitution, as well as the fact that property may only be seized for the needs of society and must be adequately compensated for, the petitioner doubts whether the regulation established by Paragraph 1 of Article 8 of the Law is in conformity with Article 23 of the Constitution.

In its petition, the petitioner also invokes the provision of the Constitutional Court’s ruling of 22 December 1995 which states that it is impossible to attain justice by recognising the interests of only one group or one person and by denying the interests of others at the same time. It is impossible to solve the clashes of interests by making absolute the protection of the rights of a person who attempts to restore the rights of ownership to a residential house by recovering it in kind, and, at the same time, denying the right of tenants to possess a dwelling place. Along with these arguments, the petitioner presents the statement of the Constitutional Court’s ruling of 12 November 1996 which states that the legal norm by which the state undertakes respective responsibilities, in this case—to provide the tenants who reside in the houses which are subject to being returned to former owners with corresponding dwelling place, must be grounded on material and financial resources. Otherwise, this legal norm becomes ineffective and it is impossible to make use of it.

In view of the arguments set forth, the petitioner contends that, unlike as it has been until now, at present under Paragraph 1 of Article 8 of the Law dwelling-houses are returned in kind to former owners regardless of the fact that tenants reside there. Due to this the legal situation of tenants is changed in essence, the principle of persons’ rights equality is violated and a privilege is given to former owners because of their social situation. The tenants do not feel safe in the dwelling place wherein they reside, especially when the atmosphere of confrontation prevails and the conflict of interests occurs. Therefore, in the opinion of the petitioner, Paragraph 1 of Article 8 contradicts Article 29 of the Constitution, nor is it compatible with Paragraph 1 of Article 24 of the Constitution which provides that a person’s dwelling place shall be inviolable.

Besides, the petitioner notes, the tenant is a consumer. Under Article 46 of the Constitution, the State shall defend the interests of the consumers, meanwhile by the impugned legal regulation, the constitutional rights of tenants are violated in this respect, too.

The petitioner notes that the impugned norm of Article 8 of the Law by which dwelling-houses are returned in kind to former owners, as well as the impugned norms of Article 20 of the Law, violates the rights of ownership of persons who have acquired a dwelling place in the houses which are subject to being returned. On the other hand, the rights of persons to whom the rights of ownership to dwelling-houses are restored are not protected sufficiently as they are obligated to conclude a dwelling place rent contract with the municipality.

Basing himself on Article 5 and Paragraph 4 of Article 59 of the Constitution, the petitioner emphasises that Seimas members, being in office and adopting laws, conform to the Constitution and the interests of the State. When adopting decisions, the legislature has to understand the financial capacity, and material resources of the State, as well as take into consideration as to how his decisions will affect all taxpayers. In this respect, according to the petitioner, the provisions of Paragraph 1 of Article 4 of the Law may be called to question. Following the pre-war tradition, the legislature increased the size of land plots to which the rights of ownership are restored from the former norm of 80 ha to 150 ha. Due to such a decision, having in mind that the reform has already started, undoubtedly additional financial resources are required for the redesigning of plans of the organisation of land exploitation, and for harmonisation of different interests of people (in the 3 ha land plots, in the plots on which there are enterprises and in other zones).

Even more doubts arise to the petitioner regarding the norm of Item 2 of Article 15 of the Law by which dwelling-houses (parts thereof) shall be purchased in the case that they have virtually been rearranged so that more than 60 per cent of the main constructions have been changed which makes it impossible to separate the additional gross floor area from the original one and if the gross floor area exceeds by 30 per cent the original one. Thus, in the case that the remainder of the constructions is a little more than 40 per cent, the whole house should be returned to its owner or his heir. According to engineering calculations, very often 40 per cent of construction elements of a building constitute merely 15 per cent of the total value of the building. Thus, cases are possible when on the grounds of the 15 per cent of the existing property the owner is returned the whole building. Conforming to such a principle, one can distribute a considerable portion of public property to private persons. Meanwhile, Paragraphs 2 and 3 of Article 46 of the Constitution provides that economic efforts and initiative which are useful to the community are supported and economic activity is regulated so that it serves the general welfare of the nation. Article 5 of the Constitution stipulates that state institutions shall serve the people, while Paragraph 4 of Article 59 of the Constitution clearly indicates that Seimas members shall act in accordance with the interests of the State. Contrary to these provisions of the Constitution, the impugned norms of the Law more reflect satisfaction of group interests, furthermore, it is done at the expense of the taxpayer. One disregards the fact that in the case that it is impossible to return property in kind, a former owner is entitled to choose the way of compensation that is provided for by the Law, because fair compensation also ensures the restoration of the rights of ownership. Therefore, the petitioner is of the opinion that the norms of Paragraph 1 of Article 4 and those of Item 2 of Article 15 of the Law contradict Article 5, Paragraphs 2 and 3 of Article 46 and Paragraph 4 of Article 59 of the Constitution.

III

In the course of preparation of the case for the Constitutional Court hearing, the representative of the party concerned A. Raudonius presented the following counter-arguments in writing.

The provision “the land shall be returned in kind without delay” of Paragraph 4 of Article 4 of the Law should not be treated without reservations. Such a wording was adopted in order to speed up the returning of property. Actually, this means that in the case that there are clear boundaries of a land plot, and no disputes arise as to the claimants to the plot or its boundaries, the right of ownership is restored and land is returned by not raising additional conditions and without waiting until privatisation issues of other land plots have been decided or projects of the organisation of land exploitation in cadastral areas have been prepared. The rights of ownership to land in kind are restored by designating the boundaries of the land plot which should be returned in the land reform project of the organisation of land exploitation and marking them on the locality. Such an explanation is consolidated in substatutory acts, namely in the Government Resolution (No. 1057) “On the Procedure and Conditions of the Implementation of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 29 September 1997. In addition, the legislature established the impugned provision on the grounds of economic motivation as well. The Constitution protects the rights of ownership, therefore, the returning of property which earlier belonged by right of ownership to its former owner in kind cannot be treated as granting a privilege on the grounds of a social position. The representative of the party concerned is of the opinion that Paragraph 4 of Article 4 of the Law is in compliance with the Constitution.

The representative of the party concerned did not agree with the arguments of the petitioner concerning the non-compliance of Paragraphs 9 and 11 of Article 4 of the Law with the Constitution. He noted that, according to the conclusions of scientists and technical conclusions of garden exploitation, it was calculated that gardens yield good harvests, i.e. they are profitable, for about 20 years. According to present data, a considerably greater part of the existing industrial gardens, berry plantations and arboreta have been yielding harvests for 15 years. Thus, for many of them the period of yielding good harvests will end after three or five years. It would be unfair not to return garden land to the owners and leave it to the enterprises or other persons who, after a few years, will have to clear that land plot of old trees and berry shrubs and to plant new ones. Returning the said land, one permits using the trees and berry shrubs of industrial gardens, berry plantations and arboreta for three years without any preliminary conditions of the owners. During this period the land owners may not hinder to utilise the said gardens, berry plantations and arboreta. In the case that the owner has no financial possibilities of paying for the trees and berry shrubs, he may not prohibit the utilisation of the gardens. In addition, the owners of land and those of gardens, berry plantations and arboreta are not deprived of an opportunity to conclude an agreement on land rent etc.

Neither does the representative of the petitioner hold that Paragraph 11 of Article 4 of the Law by which land which is in rural areas is returned in kind and which was rented to natural and legal persons for the maintenance of economic-commercial buildings and utilities (those which are under construction and those that are already built) and which belong to the latter by right of ownership contradicts the Constitution. He noted in his explanation that the legal status of such buildings, as a rule, is not entirely defined. After agricultural enterprises decided to end their activity, the said buildings were given as shares to their former members who often do not use them, therefore, the land around them is utilised ineffectively. The legislature adopted a provision to return such land to the owners who will utilise it in a proper way (when buildings are pulled down) or will purchase the buildings from former sharers and utilise them for agricultural purposes. There is a grounded probability that land owners will purchase or acquire as property in other ways economic-commercial buildings. Paragraph 5 of Article 21 of the Law, too, provides for a preference for former owners to acquire the buildings and utilities belonging to the State, municipalities or agricultural enterprises which are on the land plots that have been returned to them. Therefore, it would be unfair that in case the land around and under the said buildings is not returned, later on the owner himself would have to purchase this, i.e. his own, land. A reverse process is possible, too, i.e. the owners of the buildings who utilise them according to their purpose will purchase this land under the procedure established by law. In addition, the Law provides for establishment of easements for land owners. Thus, there are not any obstacles or hindrances for building owners to use the land which is necessary for the maintenance of buildings.

Adopting the impugned provisions, the legislature attempted to preserve traditionally integral farms. In the opinion of the representative of the party concerned, the statement of the petitioner that by the provisions established by Paragraphs 9 and 11 of Article 4 of the Law that the industrial activities of these complexes will be violated, and that their useful technological opportunities would remain unused, is groundless. These provisions of the Law do not create obstacles to efforts and initiative which are useful to society, therefore, they are in compliance with Paragraphs 2 and 3 of Article 46 of the Constitution.

The representative of the party concerned disagreed with the arguments of the petitioner concerning Paragraph 1 of Article 8 and the impugned paragraphs of Article 20 of the Law. He noted that the Law ensures not only the rights of the owners of dwelling-houses but also those of tenants. The tenants may not be evicted until the State does not have to propose anything for the rented apartment. The following guarantees have been provided for the tenants: they may be provided with another dwelling place for no consideration; they may be compensated the expenses of the acquisition of another dwelling place; or, at the request of the tenant, he may be allocated a land plot for construction a dwelling-house. The legislature, seeking to protect the rights of tenants, established that the intermediary between the owner and the tenant is the municipality. Under exceptional circumstances (of returning property), one attempts to evade the direct contact between the tenant and the owner. Thereby one blocks the way to arbitrariness, and the tenant is protected from increase of rent.

The legislature, deciding the question whether the owners should be compensated for dwelling-houses by purchasing them by the State, or whether the tenant should be granted another dwelling place or other guarantees, was following moral aspects as well, as material expenses in both cases were the same. Priority was given to the owners due to the fact that this is their property while the Constitution and the laws protect property. In the case that the owners do not wish to recover houses in kind wherein tenants reside, the Law provides that they must be compensated by purchasing their houses by the State.

Therefore, the representative of the party concerned is of the opinion that the impugned provisions of the Law are in compliance with Article 23, Paragraph 1 of Article 24, Article 29 and Paragraphs 2 and 5 of Article 46 of the Constitution.

Regarding Paragraph 1 of Article 4 and Paragraph 2 of Article 15 of the Law, the representative of the party concerned explained that the legislature, adopting the impugned norms, was following several principles, and that of justice and property protection in the first place. By returning land formerly expropriated by the occupation government, the State attempts to implement justice in respect to the owners. Therefore, when the owners are returned the biggest possible formerly possessed land plots, i.e. when it is increased up to 150 ha by the Law, then the principle of justice is implemented in a wider scope. Besides, by this new regulation one promotes the establishment of large farms. A large farm is economically stronger. This is clearly confirmed not only by scientific conclusions but also the practice of western European states. The statement that such a decision is linked with additional financial resources is not sufficiently grounded. Indeed, these financial resources carry less weight than the end sought.

The representative of the party concerned underlined that Item 2 of Article 15 of the Law, under which dwelling-houses (parts thereof) shall be purchased in the case that they have virtually been rearranged so that more than 60 per cent of the main constructions have been changed which makes it impossible to separate the additional gross floor area from the original one, and if the gross floor area exceeds by 30 per cent the original one, is in compliance with the Constitution, as the owners have the legal as well as moral right to recover their property. Therefore, in the Law, the legislature intentionally opted for a size expressed by a percentage form. In addition, after 60 per cent and not 51 per cent have been established, one avoids the complex procedure of calculation of the amount of the changed main constructions.

In view of the arguments set forth, the representative of the party concerned is convinced that Paragraph 1 of Article 4 of the Law and Item 2 of Article 15 of the Law are in compliance with Article 5, Paragraphs 2 and 3 of Article 46 and Paragraph 4 of Article 59 of the Constitution.

IV

In the course of preparation of the case for the Constitutional Court hearing, written explanations of Prof. Antanas Stanevičius, Chairman of the Agriculture House of the Republic of Lithuania, and Dr. Gintautas Šatkauskas, a senior scientific worker at the Lithuanian Institute for Agrarian Economy under the Ministry of Agriculture of the Republic of Lithuania, were received wherein it is pointed out that the impugned norms of the Law by which the returning of land to the owners in kind is regulated is in compliance with the Constitution.

V

In the hearing of the Court, the representatives of the petitioner V. Andriukaitis and R. Dovydėnienė reiterated the arguments pointed out in the petition. The representative of the party concerned A. Raudonius virtually reiterated the arguments set forth in the written explanation.

In the court hearing, the representative of the party concerned A. Kubilius, holding that the request of the petitioner is groundless, presented these counter-arguments.

The legislature, deciding the questions of restoration of the rights of ownership to dwelling-houses, adhered to the following principal positions.

1. When the rights of ownership to the existing real property are restored, the main provision that one should invoke is justice. It is impossible to attain justice when, in case there is a complex discord of interests, the interests of only one group are satisfied. As regards the restoration of the rights of ownership to dwelling-houses which are inhabited by tenants, it should be noted that there is one group which is owners who wish, entirely and without delay, to restore the rights of ownership in kind to buildings formerly possessed by them and to dispose of them freely. Meanwhile, the tenants residing in the said buildings wish to privatise the rented dwelling place without delay. In case of such discord or even clash of interests, it is only possible to implement justice by a compromise decision when the balance of interests is sought. The legal and financial burden of coordination of interests should be borne by the State.

2. As shown by the 7-year practice of the restoration of the rights of ownership, the relations between the owners to whom the rights of ownership to dwelling-houses are restored and the tenants who reside in such buildings may lead to a potential conflict, therefore, it is necessary to look for such ways of restoration of the rights of ownership so that the owner would not have direct legal and financial relations with the tenant, and, thus, the State should undertake the role of intermediary.

3. The system of guarantees for the tenants who reside in houses subject to being returned is exceptionally important when one decides the issue of restoration of the rights of ownership to dwelling-houses. Not only must this system protect the tenant from direct legal and financial relations with the owner but provide clear guarantees under which the tenant will be allocated another dwelling place of the same value in the course of the shortest possible time period.

The representative of the party concerned noted that the Constitutional Court, in deciding the issue of restoration of the rights of ownership to dwelling-houses in a number of cases at law, had stated several principal matters on the grounds of which the norms of the Law had been formulated. The representative of the party concerned mentioned the statement of the Constitutional Court’s ruling of 22 December 1995 that, if a former owner requests the restoration of a house (or a portion thereof), or an apartment in kind, the legal condition of the tenant shall remain intact, however, the tenant is not entitled to privatise the aforesaid dwelling place. The rent with the tenant may be forfeited and he may be evicted in the case that he is allocated a corresponding dwelling place. The representative of the party concerned also reminded the provisions of the Constitutional Court’s ruling of 12 November 1996 stipulating that in restoration of the rights of ownership, the priority is given to returning property in kind, and that when the owners are being returned their dwelling-houses, the interests of tenants are protected by providing them with another dwelling place. The representative of the party concerned emphasised the statement which had been stated by the Constitutional Court many a time that the legal norm by which the State burdens itself with a respective responsibility, in this case—to provide the tenants who reside in the houses which are subject to being returned to former owners with corresponding dwelling place—must be grounded on material and financial resources, because otherwise this legal norm becomes ineffective nor is it possible to make use of it.

Summarising the expressed thoughts, the representative of the party concerned noted that all these principles determined those principal provisions which had been reinstated into the Law on 1997, since, during the period of 1992–1996, the legislature held somewhat different views. The legislature is entitled to implement the principles, expressed by the Constitutional Court, in various ways. The essential matters, however, such as coordination of interests of various groups and search for compromise decisions, as well as clear mechanisms of restoration and realisation of principal rights—the rights of ownership and the right of the tenant to a dwelling place—are obligatory to every mechanism of restoration of the rights of ownership as provided by the Law.

In the opinion of the representative of the party concerned, in 1997, the legislature, deciding the issue of restoration of the rights of ownership to a dwelling place, scrupulously taking into consideration the provisions set down by the Constitutional Court, evaded many vices of the former variants of this law due, first of all, to the fact that it introduced a new truly compromise mechanism of restoration of the rights of ownership, by making the owner to whom the right of ownership is restored rent the returned dwelling place to the municipality. Alongside, by such means the legal situation of the tenant is preserved: he remains the tenant of the dwelling place and pays rent to the municipality. The municipality is responsible for the maintenance of the house, thus, the owner may and must put in all claims to the municipality but never to the tenants. Thus, the legislature has attained the following main goals.

1. A compromise decision had been adopted: the owner is returned the property in kind in case he agrees to rent it to the municipality. In reality the owner may use his property only after the tenants are provided with another dwelling place.

2. The tenants have not any opportunity to privatise the dwelling place which is used by them at present, and in case it is in the process of returning to the owner, however, Paragraph 3 of Article 20 of the Law provides that the municipality must, under the procedure and conditions established by the Government, issue a guarantee certificate which confirms that the tenants who reside in the house (part thereof), or apartment that has been returned to the owner will be provided with another dwelling place for no consideration. This provision is much more favourable to the tenants if compared with analogous provisions of legal regulation. At present the State grants the tenant another dwelling place as until now the State provided him with another dwelling place which he could privatise. This is another step when the State attempts to burden itself with the search for compromise.

3. The State obligates municipalities to be a legal and financial intermediary in the relations between the owners and tenants. In case of conflict of interests of various social groups, and for which none of the groups is responsible, such a role of intermediary is obligatory for the State.

4. The State, right after the adoption of the Law, precisely calculated to find out what material-financial resources would be needed to provide the tenants with another dwelling place. The Programme for Providing the Tenants of the Dwelling-Houses which Have Been or are Subject to Being Returned to the Owners with Apartments as approved on 4 November 1997 by the Government provides that 8,182 apartments will have to be built in the course of 10 years with the total floor area of 441,828 sq. metres, and it will, under standard prices, cost 1,005,410,000 Lt. Under this programme it was provided that for this purpose the funds of 18,700,000 Lt must be allocated in 1998. These have been allocated in this years’ budget, and during the nine months of this year the Ministry of Finance has allocated exactly 75 per cent of this amount.

The representative of the party concerned, in view of the aforesaid arguments, did not agree with the argument of the petitioner that the impugned norms of Article 20 of the Law do not protect the rights of tenants and that they violate the principle of the equality of all people before the law. He also did not recognise that Item 2 of Article 15 by which dwelling-houses (parts thereof) shall be purchased in the case that they have virtually been rearranged so that more than 60 per cent of the main constructions have been changed which makes it impossible to separate the additional gross floor area from the original one and if the gross floor area exceeds by 30 per cent the original one contradicts the Constitution. The representative of the party concerned is of the opinion that this is not a constitutional but a mere technical dispute concerning the situation when a rearranged house is not subject to being returned in kind.

The representative of the party concerned noted that, as regards the restoration of the rights of ownership and the property reform in Lithuania in general, it is most important to seek actual justice. Such justice is that of compromise. A compromise is something by which no party is satisfied by 100 per cent. At present this is so, too: both the owners and tenants want different variants of the Law. It is evident, however, that there will never be a law with which everyone would be satisfied.

The Constitutional Court

holds that:

Article 1 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property of 1 July 1997 provides that this law shall regulate recognition of restoration continuance and procedure and conditions of the rights of ownership which were commenced to restore by the formerly effective restitution law, by assessing the established objective social property relations.

The preamble of the Law underlines that upon restoration of the independence of the Republic of Lithuania by the Supreme Council-Reconstituent Seimas by the acts of 11 March 1990, the laws pressed on by a foreign state ceased to exist by which the occupation government expropriated the possessions from citizens of the Republic of Lithuania. It is also emphasised therein that the rights of ownership to property acquired by citizens of the Republic of Lithuania prior to the occupation are not abolished and they have continuance, and that restoration of continuous rights of ownership is based on the provision of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 by which the citizens of the Republic of Lithuania shall be returned their property, and, in the event that there is no such possibility, they shall be fairly compensated. It is also set forth in the preamble of the Law that the legislature has passed this law while taking account of the Constitutional Court’s rulings and decisions adopted in 1994–1996, and the limit of 150 ha which was established by the 1922–1940 land reform. The said provisions of the preamble reflect the legal, historical, and social context of the enactment of the Law, of which one should take account in assessing whether the norms of the Law impugned by the petitioner are in compliance with the Constitution.

1. On the compliance of Paragraph 4 of Article 4 of the Law with the Constitution.

Article 4 of the Law provides for the conditions and procedure for the restoration of the rights of ownership to rural land. Paragraph 4 of the said article prescribes:

“Land shall be returned in kind without delay. In those parts of the territory of the State of Lithuania where the patch system existed, land shall be returned and compensated in kind under land reform projects of the organisation of land exploitation. By the same manner a land plot the value of which is of equal value shall be transferred into property for no consideration.”

The petitioner notes that the provision of the Law “the land shall be returned in kind without delay” may be treated in its absolute meaning, which means that by it land will be returned in kind without necessary planning nor coordination of the interests of former owners and those of society. Thus, according to the petitioner, an advantage has been granted to the person who is subject to the restoration of the rights of ownership. Therefore, in the opinion of the petitioner, Paragraph 4 of Article 4 of the Law contradicts Article 29 of the Constitution, which provides:

“All persons shall be equal before the law, the court, and other State institutions and officials.

A person may not have his rights restricted in any way, or be granted any privileges, on the basis of his or her sex, race, nationality, language, origin, social status, religion, convictions, or opinions.”

In the norms of Article 29 of the Constitution the principle of the equality of all persons before law is entrenched. This is a constitutional guarantee for the inborn human right to be treated on the equal basis with the others. However, as it was emphasised by the Constitutional Court in its rulings many a time, the constitutional principle of equality of all persons as such does not deny the fact that the law may establish different legal regulation with respect to certain categories of persons who are in different situations. The Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property is a special (ad hoc) law. It regulates the conditions and procedure for the restoration of the rights of ownership. It is evident that the legal situation of persons to whom the rights of ownership are restored under the Law is different than that of persons to whom this Law is not applied, and this conditions respective peculiarities in the Law, when regulating their rights and duties in the process of the restoration of the rights of ownership. It is important that by such legal regulation the requirements of the Constitution be not violated, including those provided for by Article 29 of the Constitution.

Construing the provision of the Law “land shall be returned in kind without delay” in a systematic manner, i.e. together with the other norms of the Law, it is evident that it does not deny the necessity that when one decides the questions of the returning of land in kind, one must observe the requirements of laws and substatutory legal acts. As the restoration of the rights of ownership has been going on since 1991, the impugned norm of the Law is of incentive nature: it demands that the process of the returning of land be not procrastinated and that it be speeded up, and, in respective cases (for instance, when there are clear boundaries of the land plot which is subject to being returned) that land be returned without delay. Taking account of these arguments, as well as the link of the impugned norm with concrete norms of the Law regulating the conditions and procedure for the restoration of the rights of ownership to land, there are no grounds to deem this provision of the Law to be granting advantages to former owners in respect to other persons.

Therefore, it should be concluded that Paragraph 4 of Article 4 of the Law is in compliance with Article 29 of the Constitution.

2. On the compliance of Paragraphs 9 and 11 of Article 4 of the Law with the Constitution.

Paragraphs 9 and 11 of Article 4 of the Law provide:

“9. Land on which there are industrial gardens, berry plantations and arboreta shall be returned in kind to citizens. The users of this land, provided the land owner wishes and settles accounts with the users for the trees and berry shrubs (save for another agreement) must abandon the said land within 3 years. The owners of the returned land shall settle accounts with the users for the trees and berry shrubs under the procedure established by the Government.

<...> 11. Land which is in rural areas which was rented to natural and legal persons with the object of the maintenance of economic-commercial buildings and utilities (those which are under construction and those that have already been built) shall be returned in kind. Citizens to whom the said land is returned in kind must conform to the easements established by land reform projects of the organisation of land exploitation.”

The petitioner is of the opinion that these norms of the law provide that the land which is necessary for the maintenance of economic-commercial buildings and constructions that belong to natural and legal persons by right of ownership, as well as the land on which there are industrial gardens, berry plantations and arboreta belonging to agricultural enterprises, shall be returned in kind to former owners unconditionally. This determines decay of the established commercial infra-structures, and is not in line with the public need to use land according to its purpose. Therefore, in his opinion, the aforesaid provisions of the Law contradict Paragraphs 2 and 3 of Article 46 of the Constitution which prescribe:

“The State shall support economic efforts and initiative which are useful to the community.

The State shall regulate economic activity so that it serves the general welfare of the nation.”

The Constitutional Court notes that judging the issue of the compliance of the impugned norms of the Law with the Constitution, along with the paragraphs of Article 46 of the Constitution which have been pointed out by the petitioner, one has to take account of Paragraph 1 of the same article, wherein it is provided that Lithuania’s economy shall be based on the right to private ownership, freedom of individual economic activity, and initiative. The fundamental role of the consolidation and strengthening of private ownership in the economy of this country is given by this provision defining the basis of national economy which is at the beginning of the Chapter National Economy and Labour of the Constitution. There is no doubt that the other paragraphs, too, of Article 46 of the Constitution are devoted for strengthening and consolidation of private ownership in the national economy in the first place. Therefore, it is possible to assert that by the said paragraphs of Article 46 of the Constitution the duty of the State is established to support economic efforts and initiative which are based on the right of private ownership and which are useful to the community.

The consolidation of private ownership in the national economy is accomplished on the basis of privatisation and re-privatisation. Land reform and restoration of the rights of ownership to land which are accomplished in this country are inseparable parts of the same process. By means of the legal regulation of this process, one attempts to ensure appropriate restitution procedure, alongside, the provision of the Constitution is implemented that Lithuania’s economy shall be based on the right to private ownership. The Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property gives priority to returning property in kind. The returning of property in kind, however, in many cases is linked with respective conditions and limitations as established by the Law. The conditions and procedure of restoration of the rights of ownership to rural land are regulated by Article 4 of the Law the compliance of provisions whereof with the Constitution is impugned by the petitioner.

In its rulings, the Constitutional Court has noted many a time that in restoring the rights of ownership to land one has to coordinate the interests of both the land owners and its present users. For example, in its ruling of 27 May 1994, the Court held: “Unconditional restoration of land would violate industrial-technological integrity of the existing complexes, it even can lead to the ruining of all the operation of these units, so that their useful technological potential would be left unused. This would impair the public need for specialised production.”

Investigating in this respect Paragraph 9 of Article 4 of the Law which is impugned by the petitioner, it should be noted that therein priority is given to returning land in kind, alongside, legal measures are provided for the protection of the interests of present land users. For instance, after a citizen has been returned his land, the owners of trees and berry shrubs which are on the said land are allowed to use industrial gardens, berry plantations and arboreta for three years without any preliminary conditions. An analysis of the norms established by Paragraph 9 of Article 4 of the Law allows maintaining that the land owner who has not settled accounts with the users for the trees and berry shrubs has no right to prohibit the continued use of the gardens. Alongside, the impugned paragraph of Article 4 of the Law does not deprive one of the possibility of concluding an agreement on land rent between the land owner and its user. Thus, the allegation of the petitioner that the Law provides for the unconditional returning of land regardless of the established socio-economic relations should be deemed to be groundless.

Paragraph 11 of Article 4 of the Law regulates the returning of land which was rented to natural and legal persons for the maintenance of economic-commercial buildings and utilities which belong to them by right of ownership to former owners. Attempting to secure the use of the buildings and utilities which are on the land which has been returned according to their purpose, it is established by impugned Paragraph 11 of Article 4 that citizens to whom the said land has been returned in kind must conform to the easements established by land reform projects of the organisation of land exploitation. Land easements are defined by the Republic of Lithuania’s Law on Land as the obligations of the landowner or the user of state-owned land to allow, according to the procedure established by law, other persons to use of a portion of land plot in a limited manner. Thus, the law secures that the owners of industrial-commercial buildings will have an opportunity to make use of the territory necessary for the maintenance of the buildings.

Thus, although, if compared with the restitution law in force earlier, the legislature expanded the returning of rural land in kind, alongside the Law provides for necessary guarantees that land and the existing structures be further used according to their purpose. Therefore, the conclusion should be drawn that Paragraphs 9 and 11 of Article 4 of the Law are in compliance with Paragraphs 2 and 3 of Article 46 of the Constitution wherein it is established that the State shall support economic efforts and initiative which are useful to the community and that it shall regulate economic activity so that it serves the general welfare of the nation.

3. On the compliance of Paragraph 1 of Article 8 and Paragraphs 1, 2, 3 and 4 of Article 20 of the Law with the Constitution.

Article 8 of the Law regulates the conditions and procedure for the restoration of the rights of ownership to dwelling-houses (parts thereof) and apartments. It is prescribed in Paragraph 1 thereof:

“The citizens who are pointed out by Article 2 of this law shall be restored the rights of ownership to dwelling-houses (parts thereof) and apartments by returning them in kind save the dwelling-houses (parts thereof) and apartments which are subject to purchase by the State under Article 15 of this Law.”

Article 20 of the Law establishes state guarantees for the tenants of the dwelling-houses (parts thereof) and apartments subject to being returned, and regulates the rights and duties of tenants and the owners. Paragraphs 1, 2, 3 and 4 of the said article provide:

“1. When a citizen is returned a dwelling-house (part thereof) or apartment wherein tenants reside, all the rights and duties of tenants shall be taken over by the municipality in pursuance of the agreement on dwelling place rent under the procedure established by the Government until the municipality provides the tenant with another dwelling place or settles accounts with him by means of other ways as established by this law. Until that time, the owner shall be prohibited from cancelling the agreement on rent with the municipality, and any eviction of the tenants except as in cases provided for by the Civil Code shall be prohibited.

2. The municipality, after it has taken over the rights and duties of tenants, shall rent the dwelling place under the procedure and conditions established by the Government to the tenants residing in the said dwelling place, and shall take care of its maintenance and repairs. The said tenants shall pay rent and payment for communal service to the municipality under the rates set down by the municipality, while the municipality shall settle accounts with the owner of the returned dwelling-house (part thereof) or apartment according to the agreement on dwelling place rent under the procedure and conditions established by the Government.

3. The municipality must, under the procedure and conditions established by the Government, issue a guarantee certificate confirming that the tenant who resides in the returned dwelling-house (part thereof) or apartment will be provided with another dwelling place for no consideration. Provided the tenant refuses such an opportunity, then the municipality must, under the procedure and conditions established by the Government, compensate the expenses of the acquisition of another dwelling place or, at the request of the tenant, to allocate, for no consideration, a land plot for building a dwelling-house. The tenant who has been given another dwelling place or paid compensation for acquisition of another dwelling place must empty the dwelling place he had been using within 6 months, while in case he was allocated a land plot for no consideration for building a dwelling-house, he must do so within 1 year.

4. The value of another dwelling place which is allocated for no consideration to the tenants, the expenses subject to compensation of the acquisition of another dwelling place, the size of the land plot allocated for no consideration for building a dwelling-house, shall be established under the procedure established by the Government.”

The petitioner maintains that the said paragraphs of Articles 8 and 20 of the Law contradict Articles 23, 24, 29, and Paragraphs 2 and 5 of Article 46 of the Constitution.

3.1. Article 23 of the Constitution provides:

“Property shall be inviolable.

The rights of ownership shall be protected by law.

Property may only be seized for the needs of society according to the procedure established by law and must be adequately compensated for.”

The petitioner notes that the impugned paragraphs of Articles 8 and 20 of the Law contain contradictions of dual nature to this article of the Constitution: on the one hand, the rights of ownership of persons who have acquired dwelling places in the houses subject to being returned are violated, on the other hand, the rights of ownership of persons to whom the rights of ownership to dwelling-houses by returning them in kind are restored by the Law are not protected sufficiently.

The Constitutional Court notes that in the doctrine the constitutional guarantee of property protection is, as a rule, referred to as the status quo guarantee, as it, first of all, protects persons’ property which they possess at the moment. Alongside, a broader concept of this constitutional guarantee is recognised. From this viewpoint, it is important that from the day of the restoration of the independence of the State of Lithuania, the legislature recognised, by means of legal acts, the continuance of the rights of ownership of Lithuanian citizens which had been unlawfully terminated. Therefore, the lawful interests of persons whose rights of ownership had been terminated by the occupation government are protected, while account is taken of the constitutional provisions of property protection.

As regards the first aspect of the question raised by the petitioner, it should be noted that Paragraph 1 of Article 8 of the Law provides that the rights of ownership to dwelling-houses (parts thereof) and apartments shall be restored by returning them in kind save the dwelling-houses (parts thereof) and apartments which are subject to purchase by the State under Article 15 of the Law. The impugned norm of the Law does not contain any all-encompassing rule that all dwelling-houses must be returned in kind. It points out to Article 15 of the Law Item 3 whereof provides that the dwelling-houses (parts thereof) and apartments shall be purchased by the State from the citizens as pointed out by Article 2 of this Law and that they shall be compensated in the case that the said houses have been acquired into private ownership by law. Thus, under the Law, it is impossible to return such dwelling-houses (parts thereof) and apartments in kind to persons who are subject to restoration of the rights of ownership. Such dwelling places will remain property of their present owners, and the impugned norm of the Law does not violate their rights of ownership.

In the opinion of the petitioner, the impugned norms of the Law also contradict Article 23 of the Constitution in that they not sufficiently protect the owner who is subject to restoration of the rights of ownership, as he is obligated to make an agreement on rent of the dwelling-house (part thereof) or apartment with the municipality.

Assessing the impugned norms of the Law from this point of view, the Constitutional Court notes that, by regulating implementation of the restitution, one attempts to restore justice in respect to persons who have suffered from the occupation government. Justice is one of moral values and fundamentals of the state under the rule of law. However, as the Constitutional Court held in its rulings many a time, it is impossible to attain justice when interests of one group or one person are recognised while interests of others are denied.

Attempting to harmonise the interests of the owners of houses subject to being returned and the tenants residing in such houses (parts thereof) and apartments, the Law correspondingly regulates the interrelations of the dwelling-house owner, the municipality, and the tenants. After the person has been returned a dwelling-house (part thereof) or apartment wherein tenants reside, by Paragraph 1 of Article 20 of the Law, all rights and duties of the tenant shall be taken over by the municipality. The owner and the tenants residing in the house that has been returned to the former are not linked by dwelling place rent relations. Paragraph 2 of Article 20 of the Law provides that the municipality shall settle accounts with the owner of the returned dwelling-house (part thereof) or apartment according to the agreement on dwelling place rent under the procedure and conditions established by the Government. The purpose of these legal measures of a temporary character is protection of the rights of tenants as well as those of the owners of dwelling-houses. Besides, the aforesaid measures, thus, the obligation of the owner of the dwelling-house to conclude an agreement on rent with the municipality too, are applied only in case there is a consent of the owner. In case citizens do not wish to recover their houses in kind wherein tenants reside, or they do not agree with the conditions stipulated by Article 20 of the Law, they are compensated under the procedure as provided for by Article 16 of the Law (Paragraph 5 of Article 8 of the Law). In addition, the Constitutional Court has noted in a number of its rulings that fair compensation also ensures the restoration of the rights of ownership.

In view of the aforementioned arguments, it should be concluded that Paragraph 1 of Article 8, Paragraphs 1, 2, 3 and 4 of Article 20 of the Law are in compliance with Article 23 of the Constitution.

3.2. Article 24 of the Constitution provides:

“A person’s dwelling place shall be inviolable.

Without the consent of the resident(s), entrance into a dwelling place shall only be permitted upon a corresponding court order, or according to the procedure established by law when the objective of such an action is to protect public order, apprehend a criminal, or save a person’s life, health, or property.”

The petitioner is of the opinion that by restoration of the rights of ownership to dwelling-houses by returning them in kind as regulated by the impugned paragraphs of Articles 8 and 20 of Law the constitutional guarantee of inviolability of the dwelling-place is violated; the tenants who reside in their dwelling place feel insecure.

As regards the aforesaid arguments of the petitioner, it should be noted that the norms of Paragraphs 1 and 2 of Article 24 of the Constitution constitute an indivisible whole. The constitutional guarantee of inviolability of the dwelling-place protects not the right of an individual to a dwelling place (e.g., the right to acquire a dwelling place) but the individual’s dwelling place itself from entrance into it by strangers. This constitutional guarantee obligates the State, i.e. its legislative, judicial and executive branches of power, to protect the dwelling place of individuals by means of relevant legal norms. It is important that by Paragraph 2 of Article 24 of the Constitution cases of an exceptional character are listed which may serve legitimate grounds to enter the dwelling place without the consent of the resident, i.e. only by court decision or procedure established by law.

The Constitution secures inviolability of private dwelling place, as well as that of rented by a resident. Therefore, after the rights of ownership to a dwelling-house (part thereof) or apartment have been restored under Paragraph 1 of Article 8 of the Law, the tenant continues to enjoy the constitutional guarantee of inviolability of the dwelling place wherein he resides. Seeking to protect the owner from possible attempt at his rights by the owner of the dwelling place, as well as inviolability of dwelling place, under the said norms of Article 20 of the Law the tenant remains in legal relations with the municipality but not with the owner until another dwelling place is allocated to him. Therefore, there are no grounds to maintain that the impugned norms of Articles 8 and 20 of the Law do not guarantee inviolability of dwelling place where at present tenants reside. Thus, the conclusion should be drawn that the said norms are in compliance with Paragraph 1 of Article 24 of the Constitution.

3.3. The petitioner is of the opinion that Paragraph 1 of Article 8, Paragraphs 1, 2, 3 and 4 of the Law contradict the principle of equality of persons which is entrenched in Article 29 of the Constitution.

Giving his reasons, the petitioner underlines that under Paragraph 1 of Article 8 of the Law, the owners will be returned their dwelling-houses together with the tenants who reside there. Due to this, the legal conditions of tenants become essentially changed, and the owners are granted privileges. The impugned norms of Article 20 of the Law do not provide the tenants with any guarantees as they are not supported by any material or financial resources.

It has been mentioned in this ruling of the Constitutional Court that, under Paragraph 1 of Article 8 of the Law, the rights of ownership to dwelling-houses (parts thereof) and apartments are to be restored by returning them in kind save the dwelling-houses (parts thereof) and apartments which are subject to purchase by the State under Article 15 of this law. Thus, a fundamental provision of the restitution implemented in this country has been consolidated that in case of restoration of the rights of ownership the priority is given to returning property in kind.

Alongside, it should be noted that when the restoration of the rights of ownership to dwelling-houses is regulated legally, there appears an inevitable necessity to coordinate the interests of persons to whom the rights of ownership to dwelling-houses are restored and those of tenants who reside in the said houses.

The returning of dwelling-houses in kind is conditioned by the rules and requirements as provided for by the Law. Such limitations have been established for the owners by Article 20 of the Law entitled Guarantees of the State for the Tenants of Dwelling-Houses (Parts Thereof) and Apartments. The Rights and Duties of Tenants and Owners. Under Paragraphs 1 and 2 of Article 20 of the Law, the tenant, after the owner has been returned the dwelling-house in kind, continues to remain in dwelling place rent relations with the municipality. The owner is prohibited from cancelling the agreement on rent with the municipality, nor may he evict the tenants save as in the cases provided for by the Civil Code. Thus, elucidating impugned Paragraph 1 of Article 8 of the Law together with the other norms of the Law, the assertion that by the norm contained by Paragraph 1 of Article 8 of the Law privileges are granted to persons of one social group—the owners—should be deemed to be a groundless one.

Deciding in its turn whether the impugned norms of Article 20 of the Law which regulate the legal situation of tenants are in conformity with the constitutional principle of equality of persons, one has to compare the present legal regulation of the rights and guarantees of tenants with the one which existed earlier, as the preamble and Article 1 of the Law, as mentioned, recognise the continuance of the restoration of the rights of ownership. Of course, this continuance provision must be applied, to a certain extent, to the tenants as well.

Thus, under the 18 June 1991 law on restitution, the tenants who reside in houses subject to being returned had to be provided with another dwelling place. They had the right to purchase such dwelling place under the Law on the Privatisation of Apartments by making use of the deposited state one-off payments (vouchers). Meanwhile, Article 20 of the Law provides for guarantees of different nature for tenants of dwelling places. For instance, under Paragraph 1 of the said article, the tenant will reside in the house that has been returned to the owner “until the State provides the tenant with another dwelling place or settles accounts with him by means of other ways as established by this law.”

Paragraph 3 of Article 20 of the Law obligates municipalities to issue, under the procedure and conditions established by the Government, a guarantee certificate which confirms that the tenants who reside in the house (part thereof), or apartment that has been returned to the owner will be provided with another dwelling place for no consideration. By this norm of the Law, the right has been delegated to the Government to establish a procedure and conditions of the issuing of the guarantee certificate. Thus, the conditions established by the Government will determine whether the guarantee certificate will be issued or not, i.e., whether another dwelling place will be provided or not. However, questions of this nature which are directly linked with the protection of human rights must be regulated by law. Acts adopted by the Government by their force are not equal to a law, nor may they compete nor replace a law.

In the course of the investigation of Paragraph 3 of Article 20 of the Law, some essential uncertainties occur as for the nature, force and content of the issued guarantee certificate to the tenants. As it has been mentioned in this ruling, the said paragraph obligates municipalities to issue a guarantee certificate which confirms that the tenants will be provided with another dwelling place for no consideration. As Paragraph 3 of Article 20 of the Law does not contain any provision that this is a State guarantee (obligation by the State), such a document may be treated as a legal act passed by the municipality the force of which, from the point of view of the protection of human rights, would be insufficient in this case.

Under Paragraph 3 of Article 20 of the Law, the tenants residing in the house (part thereof) or apartment which has been returned to a respective citizen must be guaranteed that another dwelling place will be allocated for no consideration. Allocation for no consideration means the transfer of a dwelling place into the private ownership of tenants. Thus, the legal status of the people residing in the dwelling-houses which have been returned will have to change irrespective of whether this corresponds with their will. In connection with this, it is noteworthy that Paragraph 5 of Article 20 of the Law virtually regulates an analogous question in a different way: tenants residing in the houses the owners of which do not wish to recover them are granted the right to purchase this dwelling place under the Law on the Privatisation of Apartments but they are not allocated this dwelling place, as in the former case, for no consideration.

Pursuant to Paragraph 3 of Article 20 of the Law, the tenant must be allocated another dwelling place for no consideration which is in line with the requirements of the Law on Self-Provision of People with a Dwelling Place, thus, its size may be greater than that which is rented. In case Paragraph 3 of Article 20 of the Law were construed in such a way, the norm of Paragraph 4 of the same article dealing with the valuation of the allocated dwelling place would become unnecessary. It is noteworthy that the provision of the Law regarding the valuation of the allocated dwelling place has been particularised by Article 9 of the Republic of Lithuania’s Law on the Amount, Sources, Payment Terms and Procedure of Compensation for the Real Property Purchased by the State as Well as the Guarantees and Privileges Provided for by the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property of 16 June 1998. It is provided therein that in the case that the value of the dwelling place transferred to the tenant exceeds that of the dwelling place that he has rented, only that portion of the newly allocated dwelling place shall be transferred for no consideration into the ownership which corresponds to the value of the dwelling place that he has rented. The tenant must purchase the remaining portion of the dwelling place in instalments for a market price no later than within 10 years under the procedure established by the Government. In such a case, however, the content of the guarantee for the tenants provided for by Paragraph 3 of Article 20 of the Law is virtually distorted.

Thus, even though the purpose of Article 20 of the Law is to establish State guarantees for the tenants residing in houses subject to being returned to former owners or in those that have been returned to the latter, however, an analysis of the norms established by Paragraphs 3 and 4 thereof allows concluding that the guarantee to allocate another dwelling place to the tenants lacks the necessary legal content.

Summarising the arguments set forth, the Constitutional Court holds that the provisions of Paragraph 3 of Article 20 of the Law stipulating “The municipality must, under the procedure and conditions established by the Government, issue a guarantee certificate confirming that the tenant who resides in the returned dwelling-house (part thereof) or apartment will be provided with another dwelling place for no consideration. Provided the tenant refuses such an opportunity, then the municipality must, under the procedure and conditions established by the Government, compensate the expenses of the acquisition of another dwelling place or, at the request of the tenant, allocate a land plot for no consideration for building a dwelling-house” does not ensure the protection of the rights of tenants. Paragraph 4 of Article 20 of the Law presupposes the fact that, contrary to what has been established in the aforesaid provisions of Paragraph 3 of Article 20 of the Law, in corresponding situations the tenant will have to purchase a portion of the newly allocated dwelling place. Thus, this paragraph of Article 20 of the Law, too, is deficient from the point of view of the protection of the rights of tenants.

In view of what has been set forth above, it should be concluded that the provisions of Paragraph 3 of Article 20 of the Law, and Paragraph 4 of Article 20 of the Law, to the extent that they are connected with the implementation of these norms, contradict the requirement of the equality of all persons before the law which is established by Article 29 of the Constitution.

3.4. Paragraphs 2 and 5 of Article 46 of the Constitution provide:

“The State shall support economic efforts and initiative which are useful to the community.

<...> The State shall defend the interests of the consumers.”

The petitioner notes that to implement the impugned norms of Article 8 and Article 20 of the Law will demand much material expenditures. The petitioner doubts whether this is in line with the provision of Paragraph 2 of Article 46 of the Constitution.

Concerning these arguments of the petitioner it is noteworthy that by the said norms of the Chapter of the Constitution which is entitled National Economy and Labour the main rules of regulation of the national economy are established. The area of regulation of the impugned paragraphs of Article 8 and Article 20 of the Law is restoration of the rights of ownership to dwelling-houses which were terminated by the occupation government by returning them in kind and safeguarding the protection of rights of tenants residing in such houses. It goes without saying, particular public expenditures are needed to solve this problem which, from the legal and social standpoint, is very complex. As mentioned, however, this does not fall within the sphere of economic activity.

The petitioner is of the opinion that the tenant is a consumer. Under the Constitution, the State must defend the interests of the consumers, however, this is not ensured by the impugned norms of Article 8 and 20 of the Law.

It is noteworthy that under Article 1 of the Republic of Lithuania’s Law on Consumer Protection a consumer is a person who buys goods and uses services for personal or household use. Dwelling place rent is an individual institution of civil law, therefore, the legal status of the tenant of a dwelling place is not analogous to that of the consumer. Thus, there are no grounds to link the protection of the rights of tenants with the constitutional guarantee of consumer rights protection and to recognise that the impugned norms of the Law contradict the provision of the Constitution pointed out by the petitioner.

In view of what has been set forth above, it should be concluded that Paragraph 1 of Article 8, and Paragraphs 1, 2, 3 and 4 of Article 20 of the Law are in compliance with Paragraphs 2 and 5 of Article 46 of the Constitution.

4. On the compliance of Paragraph 1 of Article 4 and Item 2 of Article 15 of the Law with the Constitution.

Paragraph 1 of Article 4 of the Law provides:

“The rights of ownership to land (the plot whereof does not exceed 150 ha) including forests and water bodies formerly possessed by the owner shall be restored. Provided the land plot including forests and water bodies exceeded 150 ha, the citizen has the right to choose, at the former domain, the place of the requested land plot, forest or water body to which the rights of ownership must be restored by this law.”

Under Item 2 of Article 15 of the Law, “dwelling-houses (parts thereof) and apartments shall be purchased from the citizens pointed out by Article 2 of this Law and shall be compensated under Article 16 of this law in the case that they have virtually been rearranged so that more than 60 per cent of the main constructions have been changed which makes it impossible to separate the additional gross floor area from the original one and if the gross floor area exceeds by 30 per cent the original one.”

The petitioner contends that due to the decision of the legislature to increase the land plot to which the rights of ownership may be restored under the Law, additional financial resources will be needed as the plans of the organisation of land exploitation will have to be revised, and the interests of land owners and land users will have to be coordinated. According to the petitioner, by another impugned norm the legislature provided for returning virtually rebuilt dwelling-houses to the owners due to which a big portion of public property may be distributed to private persons. The petitioner is of the opinion that the legislature, Seimas members, while adopting the aforesaid norms of the law, were not following the interests of the State nor did they comply with the requirements of the Constitution. According to the petitioner, Paragraph 1 of Article 4 and Item 2 of Article 15 of the Law contradict Article 5, Paragraphs 2 and 3 of Article 46, and Paragraph 4 of Article 59 of the Constitution.

4.1. Article 5 of the Constitution provides:

“In Lithuania, the powers of the State shall be exercised by the Seimas, the President of the Republic and the Government, and the Judiciary.

The scope of powers shall be limited by the Constitution.

State institutions shall serve the people.”

The Seimas exercises the power of the state by passing laws. The Seimas is composed by the representatives of the Nation—Seimas members. Paragraph 4 of Article 59 of the Constitution provides:

“In office, Seimas members shall act in accordance with the Constitution of the Republic of Lithuania, the interests of the State, as well as their own consciences, and may not be restricted by any mandates.”

Deciding the issue of conformity of the impugned norms of the Law with the said provisions of the Constitution, the Constitutional Court notes that on the confirmation of continuance of the rights of ownership of the Lithuanian citizens which had been terminated by the occupation government, there appeared a necessity to regulate the actual restoration of subjective rights to particular property by legal act. Establishment of the conditions for the restoration of the rights of ownership is the prerogative of the legislature. Assessing the compliance of the amendments to the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 with the Constitution, in its ruling of 27 May 1994, the Constitutional Court held that the establishment of new conditions that must be applied in the restoration of the rights of ownership is also within the competence of the legislature. The powers of the legislature are limited by the Constitution, therefore, it goes without saying, the legal norms regulating the conditions of the restoration of the rights of ownership must be in conformity with the Constitution.

Taking account of the limit of 150 ha which was established by the 1922–1940 land reform, the Law provides that the rights of ownership to land (the plot whereof does not exceed 150 ha) including forests and water bodies formerly possessed by the owner shall be restored. Additional financial resources needed to enforce this norm of the Law which are linked with the necessity to revise plans of the organisation of land exploitation etc. may not outweigh the sought aim to restore justice in respect to the people who have suffered from the occupation government, and to protect their rights of ownership. Furthermore, it is assumed that when the owners have been returned greater land plots, they will manage their farms in a more effective way and this will render more benefit to society. Such a decision of the legislature as established by Paragraph 1 of Article 4 of the Law is in conformity with the provisions, pointed out by the petitioner, of Paragraphs 2 and 3 of Article 46 of the Constitution on the social function of private ownership and which have already been discussed in this ruling of the Constitutional Court. Paragraph 1 of Article 4 of the Law are also in compliance with Article 5 and Paragraph 4 of Article 59 of the Constitution.

4.2. Item 2 of Article 15 of the Law provides for the cases when dwelling-houses which have been rebuilt are not returned to owners in kind but are purchased by the State. Taking account of the provision of the Law on continuance of the rights of ownership, it is important to recall as to how this issue was regulated by the prior in force law on restitution.

For instance, Article 14 of the 18 June 1991 law, as well as the 12 January 1993 and 11 January 1994 amendments to this article, established that dwelling houses shall be purchased by the State if the gross floor area has been increased by more than one third in the manner which makes it impossible to separate the additional gross floor area from the original one. The amendment of 11 January 1994, along with the said provision, stipulates: “<...> or if the main constructions have been changed by more than 50 per cent.” Such a legal regulation was essentially changed only by the amendment of 3 June 1995.

The impugned norm of the Law also contains the aforementioned condition that the dwelling-houses shall be purchased by the State if the gross floor area exceeds by 30 per cent the original one. However, the first stipulation of this norm is that more than 60 per cent of the main constructions must be replaced. Assessing this legal regulation, it should be noted that it is not fair in respect to the citizens to whom the rights of ownership to houses have already been restored when one was taking account of another norm of replacement of the main constructions, which determined that dwelling-houses were not to be returned to them in kind but purchased by the State. Besides, during the whole period when the 18 June 1991 law on restitution was in force, the persons, to whom dwelling-houses (parts thereof) or apartments were being returned in kind or another dwelling place was allocated into ownership instead of them, had, together with the members of their family, to empty the rented dwelling place of the State (municipal) or public apartment fund. At present the law does not contain such an obligation.

On the grounds of the impugned norm of the Law, the owner may be returned his dwelling-house in kind, from which only 40 per cent of the main constructions are left, and which is, therefore, virtually a new object of the rights of ownership. Assessing this norm, it should also be noted that the Law does not provide for the obligation for the owner to whom the dwelling-house has been returned in kind to compensate the house improvement expenses to the State as it was established by the prior in effect law on restitution. Therefore, the impugned norm of the law is not fair in respect to other members of society, because their collectively accumulated funds were used to rebuild and improve the dwelling-houses which are returned to the owners.

Thus, there exist grounds to assert that the existing legal regulation grants certain privileges to the persons to whom the rights of ownership to dwelling-houses are restored if compared to other members of society. Therefore, it contradicts the requirement established by Article 29 of the Constitution that all persons shall be equal before the law.

In view of the arguments set forth, it should be concluded that the provision “more than 60 per cent of the main constructions have been replaced” of Item 2 of Article 15 of the Law contradicts Article 29 as well as Paragraphs 2 and 3 of Article 46 of the Constitution. Item 2 of Article 15 of the Law is in compliance with Article 5 and Paragraph 4 of Article 59 of the Constitution.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Paragraphs 1, 4, 9 and 11 of Article 4, Paragraph 1 of Article 8, and Paragraphs 1 and 2 of Article 20 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property are in compliance with the Constitution of the Republic of Lithuania.

2. To recognise that the provision “more than 60 per cent of the main constructions have been replaced” of Item 2 of Article 15 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property contradicts Article 29 as well as Paragraphs 2 and 3 of Article 46 of the Constitution of the Republic of Lithuania.

3. To recognise that the provision “the municipality must, under the procedure and conditions established by the Government, issue a guarantee certificate confirming that the tenant who resides in the returned dwelling-house (part thereof) or apartment will be provided with another dwelling place for no consideration. Provided the tenant refuses such an opportunity, then the municipality must, under the procedure and conditions established by the Government, compensate the expenses of the acquisition of another dwelling place or, at the request of the tenant, to allocate a land plot for no consideration for building a dwelling-house” of Paragraph 3 of Article 20 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property as well as Paragraph 4 of Article 20 of the said law in as much as it is linked with the enforcement of the said norms contradicts Article 29 of the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.